Preference shifts and the change of consumption composition

William Addessi

Economics Letters, 2014, vol. 125, issue 1, 14-17

Abstract: While most of the literature explaining the change in consumption composition has focused on the role of relative prices and non-homothetic preferences, this paper examines the importance of preference shifts. I introduce dynamics in preferences and find that they play a relevant role and that their exclusion worsens model performance at least as much as the exclusion of allowing non-homothetic preferences.

Keywords: Preference shifts; Structural transformation; Multisector models; Consumption (search for similar items in EconPapers)
JEL-codes: E21 L16 O41 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:125:y:2014:i:1:p:14-17

DOI: 10.1016/j.econlet.2014.08.001

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